Atlantic City Electric Co. v. General Electric Co., 208

• Decision Date: 31 December 1962
• Docket Number: No. 208,Docket 27884.,208
• Citation: 312 F.2d 236
• Parties: ATLANTIC CITY ELECTRIC COMPANY et al., Plaintiffs-Appellees, v. GENERAL ELECTRIC COMPANY et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

312 F.2d 236 (1962)

ATLANTIC CITY ELECTRIC COMPANY et al., Plaintiffs-Appellees, v. GENERAL ELECTRIC COMPANY et al., Defendants-Appellants.

No. 208, Docket 27884.

United States Court of Appeals Second Circuit.

Argued November 14, 1962.

Decided December 31, 1962.

Milton Handler, New York City (Kaye, Scholer, Fierman, Hays & Handler, New York City, on the brief), for plaintiffs-appellees Atlantic City Elec. Co., Appalachian Power Co., Ohio Valley Elec. Corp. and others.

Edward F. Huber, New York City, (Naylon, Foster, Dean & Aronson, New York City, on the brief), for plaintiffs-appellees New York State Elec. & Gas Corp., Rochester Gas and Elec. Corp., and the Patchogue Elec. Light Co.

Webster, Sheffield, Fleischmann, Hitchcock & Chrystie, New York City on the brief, for plaintiffs-appellees Atlantic City Elec. Co. and others.

Arthur G. Coffey, Gerald Powers, Ralph Warren Sullivan, Boston, Mass., Robert W. Gelfman, New York City, Harold E. Kohn, Philadelphia, Pa., on the brief, for plaintiff-appellee City of Boston.

Sidney Goldstein, Nathaniel Fensterstock, Milton H. Pachter, New York City, on the brief, for plaintiff-appellee The Port of New York Authority.

Leo A. Larkin, Morgan N. Lipton, New York City, on the brief, for plaintiffs-appellees City of New York and others.

Le Boeuf, Lamb & Leiby, New York City, on the brief, for plaintiffs-appellees Arkansas Power & Light Co. and others, Consolidated Edison Co. of New York, Inc., Niagara Mohawk Power Corp., Orange and Rockland Utilities, Inc.

Louis J. Lefkowitz, Atty. Gen., of the State of New York, New York City, Mathias Lloyd Spiegel, Sp. Asst. Atty. Gen., New York City, on the brief, for plaintiffs-appellees People of the State of New York and New York State Thruway Authority.

Thomas F. Moore, Jr., New York City, on the brief, for plaintiff-appellee Power Authority of the State of New York.

Reid & Priest, Coudert Brothers, New York City, on the brief, for plaintiffs-appellees Dallas Power & Light Co. and Carolina Power & Light Co. and others.

John O. Tessier, Freeport, N. Y., on the brief, for plaintiff-appellee Village of Freeport.

Winthrop, Stimson, Putnam & Roberts, New York City, on the brief, for plaintiffs-appellees Consumers Power Co. and others.

Joseph W. Burns, New York City (Cyrus Austin, John P. Cuddahy, Austin, Burns, Appell & Smith, New York City, on the brief), for defendant-appellant Ingersoll-Rand Co.

Edgar E. Barton, New York City (MacDonald Flinn, White & Case, New York City, on the brief), for defendant-appellant General Elec. Co.

Harold F. McGuire, Harry H. Weil, New York City (Wickes, Riddell, Bloomer, Jacobi & McGuire, New York City, on the brief), for defendants-appellants C. H. Wheeler Mfg. Co., The Clark Controller Co., Lapp Insulator Co., Inc., McGraw-Edison Co., Ohio Brass Co. and General Elec. Co.

Albert R. Connelly, New York City, (Victor M. Earle, III, Robert S. Rifkind, Cravath, Swaine & Moore, New York City, on the brief, for Westinghouse Elec. Corp. and Haight, Gardner Poor & Havens, on the brief), for defendant-appellant I-T-E Circuit Breaker Co.

Brown, Wood, Fuller, Caldwell & Ivey, New York City, on the brief, for defendant-appellant A. B. Chance Co.

Hughes, Hubbard, Blair & Reed, New York City, on the brief, for defendant-appellant Allen-Bradley Co.

Davis, Polk, Wardwell, Sunderland & Kiendl, New York City, on the brief, for defendants-appellants Allis-Chalmers Mfg. Co. and Carrier Corp. Richard Owen, New York City, on the brief, for defendant Cole Elec. Products Co.

Proskauer, Rose, Goetz & Mendelsohn, New York City, on the brief, for defendants-appellants Cornell-Dubilier Elec. Corp. and Federal Pacific Elec. Co.

Kissam & Halpin, New York City, on the brief, for defendant-appellant Cutler-Hammer, Inc.

Meyer, Kissel, Matz & Seward, New York City, on the brief, for defendant-appellant Foster-Wheeler Corp.

Alexander & Green, New York City, on the brief, for defendants-appellants H. K. Porter Co. Inc., Wadsworth Electric Mfg. Co., Inc. and Zinsco Elec. Products Inc.

Satterlee, Warfield & Stephens, New York City, on the brief for defendant-appellant Hubbard and Co.

Stickles, Hayden, Young, Kennedy & Hort, New York City, on the brief for defendants-appellants Joslyn Mfg. & Supply Co., and The Porcelain Insulator Corp.

Casey, Lane & Mittendorf, New York City, on the brief for defendant-appellant Kuhlman Elec. Co.

Cleary, Gottlieb & Steen, New York City on the brief for defendants-appellants Moloney Elec. Co., Sangamo Elec. Co., and Wagner Elec. Co.

Kupfer, Silberfeld, Nathan & Danziger, New York City, on the brief for defendant-appellant Norbute Corp.

Laporte & Meyers, New York City, on the brief for defendant-appellant Schwager-Wood Corp.

Clark, Carr & Ellis, New York City, on the brief for defendant-appellant Southern States, Inc.

Allan D. Emil, New York City, on the brief for defendant-appellant Square D Co.

Close, Griffiths, McCarthy & Gaynor, New York City, for defendant Ward Leonard Elec. Co.

Gallop, Climenko & Gould, New York City, on the brief for defendant-appellant Worthington Corp.

Before LUMBARD, Chief Judge, and CLARK, WATERMAN, MOORE, KAUFMAN, HAYS and MARSHALL, Circuit Judges.

LUMBARD, Chief Judge.

The question for decision is whether fraudulent concealment of the existence of a cause of action under § 4 of the Clayton Act, 38 Stat. 731 (1914), 15 U.S.C. § 15, tolls the running of the four-year limitation period contained in §§ 4B and 5(b) of the Act, as amended by Act of July 7, 1955, 69 Stat. 282, 15 U.S.C. §§ 15b and 16(b). We hold that it does and accordingly we affirm Judge Feinberg's order, 207 F.Supp. 613 (1962), denying motions of the defendants in 418 related actions pending in the Southern District of New York to strike from the complaints (1) allegations relating to damages sustained prior to the statutory limitation period, and (2) allegations relating to the fraudulent concealment of the conspiracies of the defendants involved in each case.¹

Judge Feinberg, in denying the defendants' motions, certified that he was of the opinion that a controlling question of law was involved as to which there was substantial ground for difference of opinion, and that immediate appeal from his order might materially advance the ultimate termination of the litigation.² We granted the defendants' petition for leave to appeal, under 28 U.S.C. § 1292(b), Judges Friendly and Smith not participating. Because of the importance of the question we ordered argument before the court sitting in banc. The relevant issues have been so thoroughly explored by the Court of Appeals for the Eighth Circuit³ and by at least eight district judges⁴ that we deem it unnecessary to do more than briefly summarize the reasons for our conclusion.

The intendment of the relevant decisions of the Supreme Court starting with Bailey v. Glover, 88 U.S. (21 Wall.) 342, 22 L.Ed. 636 (1874), is that all federal limitation statutes are subject to the doctrine of fraudulent concealment, so that if the doctrine applies "the statute does not begin to run until the fraud is discovered by, or becomes known to, the party suing. * * *" Id. at 350. Exploration Co. v. United States, 247 U.S. 435, 38 S.Ct. 571, 62 L.Ed. 1200 (1918), applied this doctrine to the statute of limitations in the land patents act, ch. 559, 26 Stat. 1093 (1891), 43 U.S.C. § 1166. In Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946), the Supreme Court declined to "borrow" state law and applied the doctrine in a suit to enforce a federally-created equitable right arising out of § 16 of the Federal Farm Loan Act, 39 Stat. 374 (1916), 12 U.S.C. § 812, which contained no statute of limitation. Speaking for the Court, Mr. Justice Frankfurter stated: "This equitable doctrine is read into every federal statute of limitation." 327 U.S. at 397, 66 S.Ct. at 585.

Thus the doctrine of fraudulent concealment and its application to federal statutes was well known when, starting in 1949,⁵ Congress came to deal with proposals to write a limitation period into the antitrust laws in order to bring some uniformity to a field which had been left subject to the confusion of differing applicable state statutes. Section 4B, as finally enacted after six years of proposed legislation and committee hearings, reads:

"Any action to enforce any cause of action under section 4 or 4A shall be forever barred unless commenced within four years after the cause of action accrued. No cause of action barred under existing law on the effective date of this Act shall be revived by this Act." 69 Stat. 283 (1955), 15 U.S.C. § 15b.⁶

Among the prior bills which Congress failed to enact were several which expressly provided that in conspiracy cases the statute of limitations would not begin to run until the injured party discovered or had reason to discover the facts on which his claim was based;⁷ there are indications in the legislative history that Congress was aware of the issue at stake.⁸ But we do not believe that this background to § 4B evinces a congressional intention to enact an absolute period of limitation which would not be subject to tolling in cases of fraudulent concealment. The failure to enact bills containing provisions that would have embodied a discovery provision in the words of the statute is hardly the kind of express negative which we think would be necessary to reverse so well established a policy of the law.⁹ As we read the Supreme Court's opinion in Holmberg v. Armbrecht, supra, that policy is so strong that it is applicable unless Congress expressly provides to the contrary in clear and unambiguous language.

This seems to have been the view of Congressman Celler, Chairman of the Judiciary Committee of the House, who stated in response to a question on the floor of the House that: "In the case of fraud or conspiracy the statute of limitation only runs from the time of discovery." 101 Cong.Rec. 5133, 84th Cong. 1st Sess. (1955). It seems...